Smartum benefits' taxation

Maximizing Your Benefits with Smartum

With Smartum benefits, you get much more than you invest! You can download free tax guides that provide everything decision-makers need to know about the taxation of Smartum benefits. Download the tax guides here.

Physical Activity and Culture Benefit

Employers can support their employees' physical activity and cultural pursuits and deduct the full amount of these expenses from their own income tax. The benefit to the employee is tax-free if the benefit provided is considered ordinary and reasonable. The maximum tax-free support for employees’ own physical activity and cultural activities is €400.00 per employee per calendar year.

Lunch Benefit

Lunch can be provided to employees either as a fringe benefit or as a lunch deduction.

Fringe Benefit

• Employer: The benefit is offered in addition to salary. The employer pays the nominal value of the benefit but can deduct it in their taxes. It is processed along with withholding tax and payroll accounting at 75%.
• Employee: 75% of the benefit is taxable income based on the employee’s personal tax rate. The employer pays the benefit; the employee is only taxed. A fringe benefit paid as a salary supplement also contributes to pension accrual.

Lunch Deduction

• Employer: 75% of the lunch benefit's tax value is withheld from the employee’s salary. The employer pays the nominal value and the difference between the tax value and the nominal value, but can deduct it in their taxes.
• Employee: The employee pays 75% of the tax value of the lunch benefit, for example, €7.50 out of a €10.00 lunch voucher. The employer can withhold this amount from the salary.

Commuting Benefit

The commuting benefit can be provided as a supplement to salary or as part of the existing cash salary. The benefit is completely tax-free up to €3,400. It does not have to be provided to all employees and can be offered to an employee who has a company car benefit. The employer can deduct the costs of the benefit in income tax.

The commuting benefit is most advantageous when the employee’s commuting costs between home and work are less than €750 per year. In this case, the employee is not entitled to a tax deduction for commuting costs. The benefit is personal, and the employee can use it to purchase either a value ticket or a season ticket. It is intended for commuting between home and work but can also be used for travel during leisure time.

Bicycle Benefit

The company bike is a completely tax-free fringe benefit up to €1,200 per employee per calendar year. The bicycle benefit can be offered to all employees throughout Finland. Generally, the benefit is provided by deducting it monthly from the employee's salary. Read more about it here.

Massage Benefit

The massage benefit is tax-free up to a maximum of €400 per year. Massage credits can be provided up to €400 per employee per year. Massage credits can be used for sports and classic massages but not for services like spa treatments.

The tax authority has tightened regulations on the use of massage credits. Tax-free status requires that the employee uses the massage benefit only at massage locations chosen by the employer. Therefore, employers must select the service providers where massage benefits can be used, and the company ordering Smartum's massage benefits must make a separate agreement with the service provider. Employees can check current agreements through their account on the web service under the "View Agreements" section.

The employer loads the massage credits onto the employee’s Smartum account. The employee then chooses the most suitable location from those selected by the employer, books an appointment, and pays for the visit using the massage credits. Any amount exceeding the cost of the massage is paid by the employee out of pocket.

Health Benefit

The health benefit is an expanded occupational health service package. With the health benefit, you can complement your company’s existing occupational health services by offering employees additional specialist medical services, dental care, physiotherapy, and optical services. You can offer this benefit to employees completely tax-free. Smartum's health benefit has the highest tax-free usage limit on the market, allowing you to offer it tax-free up to €3,000 per employee per calendar year.

You can tailor the size of the benefit to meet your employees' needs and select the most suitable services included in the health benefit.

Smartum Benefits & Income Register

Co-payment
Charging a co-payment for physical activity and cultural benefits is entirely possible and is accepted by the tax authority. The tax authority is only interested in the portion of the benefit's monetary value paid by the employer. Employers who charge a co-payment typically use a quarter or half of the voucher's value as the co-payment amount. It is most convenient to collect the co-payment directly from the salary but can also be done in other ways. In practice, many employers do not charge a co-payment due to the administrative burden.

Physical Activity and Culture Benefit:
The physical activity and culture benefit does not need to be reported to the income register if the amount is up to €400 per person per year, the benefit is granted collectively to the entire staff, and no co-payment is charged. If a co-payment is charged, the co-payment amount is reported under income type 408 Deductible Other Items from Net Salary.
If the amount exceeds €400 per person per year, the excess is reported under income type 315 Other Taxable Benefits for Staff, and the co-payment amount is reported under income type 408 Deductible Other Items from Net Salary.

Commuting Benefit:
The employer reports the tax-free portion of the personal public transport ticket provided to the employee under income type 341 Tax-Free Portion of Commuting Ticket. The taxable portion of the ticket is reported under income type 342 Taxable Portion of Commuting Ticket.

The details must be specified as they affect the amount the employee can deduct for commuting between home and work.

Lunch Benefit:
The report of the meal benefit must be made at least under income type 317 Other Fringe Benefits. The "Other Fringe Benefits" income type report must specify what the provided fringe benefits include.

If the employer charges the employee a co-payment equivalent to the tax value of the meal benefit, the Income Register report uses income type 334 Meal Benefit and information: Co-payment for Meal Benefit Equals Tax Value: Yes. The tax value of the meal benefit is reported as €0 (income type meal benefit).

Consult your payroll department or the Income Register customer service for the most appropriate reporting method and income type for your company. Smartum’s examples serve as general guidance. Detailed instructions for reporting different income types can be found at www.tulorekisteri.fi.